AUSTIN ANNOUNCES BRISBANE FACILITY CLOSURE

AUSTIN Engineering (ASX:ANG) hopes to shave $2.8 million off annual operating costs, after closing the doors at its manufacturing facility in Brisbane.

The closure at Carole Park will be continuously rolled out until the end of February 2016, following a rationalisation of operations along the east coast.

The asset write-off is expected to cost $1.7 million in restructuring, with $300,000 already paid in leave provisions.

Austin's corporate office will continue to operate from the site to maintain the option of re-opening the facility depending on future market conditions.

"This location also has net fixed assets totalling $1.6 million and we are considering the options to relocate or dispose of these assets as needed," Austin says in a statement.

"The coal mining markets of the east coast of Australia are continuing the recent trend of deferring capex purchases of new/replacement equipment and, where possible, repairs.

"This environment has resulted in Austin having excess manufacturing capacity in this region. By closing the Brisbane facility, Austin's capacity will better match the market requirements and will offer significant annual savings."

Austin's regional facilities in Mackay and the Hunter Valley have been upgraded in recent years, to manage the manufacturing and maintenance workload. Key equipment will be relocated to these facilities to boost capacity.

The company says the rationalisation will not impact the ability to deliver products to customers.